Helping you keep it in the family
IRISH Farmers and their families have fallen victim time and time again to a tax which often results in them having to sell part of their land or their machinery to pay. Capital Acquisition Tax (C.A.T) is broken up into two different types of taxes depending on whether you inherit something of a significant value or you get a gift of it. If you receive a gift, depending on it’s value and who you received it from, you may be liable for Gift Tax. 
However, if you received an inheritance following a death, you may have to pay Inheritance Tax on it. Both are subject to different amounts depending on the value of the property and the person from whom you got the gift from/inherited from.
How do you know you’re liable?
All properties, including farm land, located in Ireland are subject to the tax but also homesor business properties (again including farm land) that are abroad but are owned by an Irish resident is subject to the tax.
How much has to be paid on these taxes depend, mostly on the value of the property and what your relation with the person giving the gift/inheritence.
Note, however, those who receive an inheritence or the gift from their spouse, you are exempt from C.A.T.
There are three different categories which help people determin how much they owe.
- Group A: A child/parent of the disponer (person giving the gift/inheritence)
- Group B: The parent/ grandchild or great-grandchild/ grandparent/ brother or sister/nephew or niece of the disponer.
- Group C: applies to any relationship not included in Group A or B such an example who be receiving a gift/inheritance from your father/mother-in-law.
Complications
However, relationships and taxes are not always that straight forward so it is important to make sure you have your facts clear before your find out you owe more than you think. One way to prevent having to pay this tax in the first place and giving your family a smooth transition into the family business is to take out a C.A.T Insurance policy. For as little as €15 per week your family members may have nothing to pay at all, when it comes to their turn to running the show.
Check out my website www.podfinancial.ie for more information or simply fill in the contact form with your specific details and I will be able to answer any questions you have.
Category: Farmers
